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Mindset & Money | Time, Knowledge, and Money

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Hosted by
Mike Ayala

In this episode of the Investing For Freedom podcast, Mike speaks about the three assets that everyone has; time, money, and knowledge. Mike explains to us how to gain more of the one you need to trade it for another, and that when you’re trading your money for other people’s time and knowledge, you’re at the pinnacle.

“Using your three assets, you can break out of inequality”


0:00 – Intro
0:18 – Robert Kiyosaki said the true measure of wealth is the number of days you can take off
0:58 – Mike hasn’t ever looked at his home as an asset
1:13 – We all have 3 assets, the first one is time, which most people trade for money
1:52 – Another asset we have is money
2:03 – And we have knowledge
2:37 – If you’re lacking in one of those, then you have to trade something else to get more
3:16 – If you’re lacking time but you have money, you can buy someone else’s time
3:27 – Professors and Academia trade their time and knowledge for money
3:48 – If you’re lacking in the knowledge you could trade your time to research or money for a course
4:11 – Mike grew up pretty poor with an abusive, drug and alcohol-addicted father
4:37 – Using your three assets, you can break out of inequality
5:18 – People think that successful people have been handed success to them
5:48 – We all have the same amount of time, and what you trade your time for is what makes you feel like you have no time left
7:13 – The difference between big business and self-employed is the way we trade our time for money
7:48 – In the investor quadrant, you’re trading money to make more money which frees up time and you can utilize other people’s knowledge
9:07 – Trading your money for other people’s time and knowledge is the pinnacle
9:37 – You can see where someone is at by how they talk about the ESBI



Thank you for joining me on the investing for freedom podcast. Today I’m going to talk to you about the three core areas of assets that I believe that all of us have access to in some way shape or form, some of them more limited than others. But if you really think about investing or investing for freedom or what we’re really talking about, Robert Kiyosaki, I heard him say years ago when I was on a, I was having dinner with him on a cruise that we go on every year with the real estate guys radio show. He was talking about measuring wealth. And he said that the way that he believes that you can truly measure wealth is the number of days that you can take off. You may have heard me share this before, but that was just mind-blowing to me because a lot of times we know we look at our balance sheet or our P and L or our financial statement. And that’s what we really measure it off. The average American, probably their biggest asset is their home. And again, Robert Kiyosaki would argue that your home is actually not an asset. I’m not here to get into that today. I would agree to some, I’ve never really looked at my asset or my house as an asset because you would have to sell it and move out to get that liquidity unless you refinance it, blah, blah, blah.

So, but really all of us have three assets that we access and that we trade for in life. The first one is time and most people trade time for money which I think is actually what we want to get away from. And if you even just look at the cash flow quadrant, and by the way, as a side note, if you haven’t read Robert Kiyosaki’s book the cash flow quadrant, it’s probably my top three books, if not my favorite book after the richest man in Babylon, but what I loved about the cash flow quadrant, even though it’s a financial book, it changes the way you think about things. And if you look at the financial quadrant it literally puts it in a, almost a T shape. And there are employees, there’s, self-employed, there are big business owners and then there are investors. Most of us have three assets is time. The other asset that we have is, money or currency if you will. And that could also be like, physical, gold, silver that kind of stuff. So we have time, we have money and then we also have knowledge, experience. Knowledge could be even a trade. So if I was a plumber by trade, I often say my knowledge allowed me to trade my time for money. If I didn’t have certain knowledge and a skill set, then my boss would not have ever paid me $35 an hour or whatever that number was in order to trade my time.

But, here’s the thing I really want you to think about. And I actually heard somebody say this and I don’t know exactly how it was said, but they made a comment or it was a post or something that I saw that made me really think about this. We have time, we have money and we have knowledge. If you’re lacking in one of those then you have to trade something else in order to get more. And this was just mind-blowing to me. And again, I wish I could give credit to whatever the post was that even got me thinking about this. I don’t remember what it was, but if you need more time, then you can buy more time if you have money, because lets just say that you have to work 60 hours a week. Well, if you had more money or resource and you could figure out how to make more money than you could buy somebody else’s time or knowledge to take something off of your plate currently. Let’s just look at the simple one laundry.

So if you need more time and you have money, you could buy someone else’s time to do your laundry. Well, it goes a little bit deeper than that. Knowledge, there’s a lot of professors, academia that, they trade their time and their knowledge for money. But the key thing here is if you’re lacking in something and I really want you to get this, we all have basically three assets, time, money, knowledge. If you’re lacking in money, then you could trade your time to get more. Or you could trade knowledge to get more. If you’re lacking in knowledge, you could trade your time to go to YouTube and research. You could trade money to take somebody else’s course to increase your knowledge, which is going to expand your money and ultimately time. The thing that I want to point out and I know there’s a lot of talk about inequality and that kind of stuff in the world and I get it. But here’s the thing a lot of people don’t know about me. I grew up pretty poor with an abusive alcoholic druggie for a dad. We all have, and I’m not saying, when it comes to the inequality conversation, I’m not saying that it doesn’t exist, but we all have three assets, time, money, and knowledge. And if there’s any level of inequality and you want to break out of that, you have the ability to do that. And I realized that some people, let’s say you were born in a super, super poor country versus somebody that’s born in America. You are definitely set back. You are definitely in a position of inequality in order to trade your knowledge for more money or in order to trade your time for more money. But that doesn’t mean that you can’t make it happen. Are you at a position of inequality? Yes, but so many people in America, we’re in this era of inequality and it’s not fair. It isn’t fair, life isn’t fair, but there are so many people around you. If you look at successful people, I think people automatically think that successful people were handed something. They were lucky. They had more opportunities than someone else. Maybe they just looked for it. It’s like I constantly talk about it. The eyes only see, and the ears only hear what the brain is looking for as Dan Sullivan would always say, it’s the reticular activator conversation.

So we all have three assets, time, money, and knowledge. And yes, some of us have more of some of these assets than others. Some of us may have more of all three assets. The reality is we all have the same amount of time. That’s just the bottom line. I still have to kind of backtrack and retract what I just said. We all have the same amount of time to begin with. But what we begin trading our time for is what makes us feel like we don’t have any time left. And what you really got to start to consider is when you’re trading your time, if you’re working three jobs and you’re not making ends meet, then you have to figure out how to get more knowledge in a certain area to provide more value so that you can get more money and trade less time. So I just really wanted to point it out just something that I’ve been thinking about. We all have three assets, time, money, knowledge, and knowledge, you could just say it’s an experience too. You got to start thinking about, if you’re lacking in certain areas, you have to trade one of those other things. So if you’re lacking in money, you got to figure out how to trade more time. If you’re lacking in time, figure out how to gain more knowledge so you can gain more money, capture your time back. It’s pretty simple. And the reason why I quoted the cash flow quadrant, even though it’s not the same three things, but the cash flow quadrant makes a lot of sense when we start thinking about this because you’re either an employee, you’re self-employed and self-employed literally means, you could be a CPA running your own accounting firm, but you actually have to show up. If you’re self-employed, you’re still billing hours. You’re still billing your time for money. The other side of the quadrant, where all the tax benefits are, where all the wealthy really make their money is on the other side, big business or bigger business. So the difference between self-employed in big businesses, the way we trade our time for money. So self-employed people are still trading their time for $65 an hour and $95 an hour or $110 an hour, or even attorneys. Some of them are trading for $500 an hour of billing time. Well, that’s still self-employed and trading your time for money.

When you get over into big business. Now, you’re taking other people’s knowledge and other people’s time and you’re utilizing that to make more money. And so that’s the big business quadrant. And then ultimately when you get to the investor quadrant, which is where Kiyosaki says, we all want to ultimately live we’re just trading our money to make more money, which is freeing up time. And we don’t really need, I’m going to be hesitant when I say this, but we don’t really need as much knowledge because we can potentially utilize other people on an investment scale, their knowledge, for instance, on David Osborne, who was episode number one. He actually says this openly. And I mean, he’s got really smart people working around him. He says it all the time, people that are smarter than him, he’s got MBAs from Harvard and Yale. I don’t know exactly where they’re from, MIT, but he’s buying their knowledge. And that’s really the big business in the investing front. He’s trading his money for their knowledge and their time, which is just compounding his money drastically. So that’s the reason why I brought up the cash flow quadrant. I hope this just triggers something in you. The cash flow quadrant employees are trading their time for money. And knowledge obviously, the self-employed is trading their time and knowledge for money. But when we get over into the big business arena, now that’s when we’re really beginning to trade our money for other people’s time and other people’s knowledge. And then the same thing with the investor quadrant, which I think is the ultimate place to be. We get to the point where we’re trading our money for other people’s time and knowledge and that’s to me, the pinnacle. And I think why I’ve loved the cash flow quadrant so much, because again, even though it was a financial book, it’s really a mindset change book. And it even helped me along the way. When I really started reading the cash flow quadrant, I probably read it 20 or 30 times.

When I really started reading that I would measure, my conversations with employees and even people at dinner. I think of this through the lens of the ESBI, because you can really see where somebody is at in their life and their thinking and where they’re trying to get to based on the way they’re having that conversation about ESBI, they’re not actually talking about ESBI, but you can put them in a quadrant and really see quickly, kind of where they’re at. And I’m not saying that from a judgmental standpoint, but you can just see what motivates them, what drives them, what their level of knowledge is, and all that. So again, we all have three assets. If you’re looking to expand your life, you want more time, you want more money, you want more knowledge, you got to trade one of those to get more of the others. So hope that helps.


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